GST on Educational Services

GST or Goods and Services Tax is levied on most of the products and services sold in India. Since the provision of education is also a service, GST becomes applicable here too. To understand how GST on educational services works, let us first check out the definition of education. 

 

The CGST Act itself does not define the term education. However, as per the Supreme Court’s decision, education has been defined as follows —‘Education is the process of training and developing knowledge, skill and the character of students by normal schooling.’

Before we look at the rates of GST on educational courses, let’s understand how educational services are classified under the Act. Basically, these services come under Heading 9992. Thereafter, they are classified into six groups and cover a wide range of education from pre-primary to specialised and other educational services.

Check out the main groups and service codes for the services under this category.

Now that you know how the educational services in India are classified, it becomes easier to understand how GST on education is levied. Check out the table below to see what the education rates on GST   are for different kinds of services in this category. 

Learn more about the GST slab rates for various goods and services in our detailed article GST Rates in India.

In addition to knowing the rates of GST on educational services, you also need to know the exemptions. Here is a closer look at the exemptions available to educational institutions under GST. 

• Course materials

• Curriculum-related materials

• Entrance examination fees

• Any excursions or trips related to the course, which is a part of curriculum requirement (food and accommodation on such trips is not exempt)

• Student administrative services like registration, printing academic transcripts, late fee payments, library administration, issuing and replacing student cards, etc.

• Transportation of students, faculty, and staff

• Security and housekeeping services at educational institutions

• Admission and exam conduction services by institutions that offer education up to higher secondary level

 

Apart from these services, education provided by the following entities is also exempt from GST on educational institutions.

• National skill development corporation set up by the government of India

• National skill development corporation approved sector skill councils

• National skill development corporation approved assessment agencies

• National skill development programs approved by NSDC 

• Vocational skill development programs approved under national skill certification and monetary reward scheme

• Any scheme implemented by the NSDC with its training partners

 

And in case of IIMs, the following services are exempt from GST on education. 

• 2 year full-time residential PG programs in Management for Post Graduate Diploma in Management (for which admission is granted via CAT)

• Fellowship programs in Management

• 5 Year Integrated Programs in management studies (excluding the Executive Development Program)

   

Besides exemptions on educational services various other goods and services are exempted under GST, learn more about it in our article GST Exemption.

Goods and Services Tax is a tax that is based on the destination. This means that the educational services will be taxed at the place in which they are consumed and not in which they are provided. That said, the place of supply is important because you need to decide if a transaction is interstate or intrastate. 

Scenario 1: Place of Supply if Supplier and Recipient are in India

In this case, two sections are important — namely sections 12(6) and 12(7).

Section 12(6): In case of admission to an educational institution, the place of supply will be the place where the event is actually held.

Section 12(7): This section deals with the following services —

 

• Organising a cultural, artistic, sporting, scientific, educational or entertainment event  (this includes the supply of services for a conference, exhibition, fair, celebration or other such events).

• Services ancillary to organising any of the events or services referred to in clause (a).

For these services, the place of supply will be decided as follows —

 

• If the service is provided to a registered person, the place of supply is the location of such a person.

• If the service is provided to anyone other than a registered person, the place of supply is a location where the event is actually held.

• If the event is held outside India, the location of the recipient is the place of supply.

Scenario 2: Place of Supply if Supplier or Recipient is outside India

In this case, the place of supply will be the place where the educational event is actually held.

Sometimes, two or more services may be provided together, in a mixed manner. These are known as composite or mixed services. In the education sector, too, this kind of bundling of services exists. 

• In the case of boarding schools, where education, boarding and lodging are all offered in an inseparable manner, the services are exempt from GST.

• In the case of dual qualifications, since the course, fees and curriculum for each qualification is separately prescribed, GST will also be applied separately.

This sums up the rates of GST on educational services as well as the common exemptions. So, if you are a recipient of these services, you can be more aware of the GST charged on them. Alternatively, if you are a provider of educational services, knowing these details can help you pay GST at the right rates.